Blockchains: An Essential to a Better Planet

What is Blockchain?

It may be defined as a decentralized electronic ledger system that is able to make a cryptographically secure and immutable record of all transactions that have value. This may be in the form of money, goods, labor, property of votes. This technology may be used to aid in peer-to-peer payments, track records and manage the value through smart contracts. This provides it the potential essentially redefine the way the current businesses and societies are operating.

Due to this, there has been a significant amount of attention given to blockchain. Despite this, there is still a plethora of things that need adjustments like user trust, current energy consumption and security risks.

In this Video the BBC explains in a verry simple and fun way what blockchain is I would recomend all to watch is.

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Blockchain Potential

As technology continually grows within its sectors and systems, there comes the opportunity to see the true capacity blockchain. This isn’t simply limited to the finance industry but for people generally and the planet itself. This challenge has arrived at an important point in the development of humanity.

After the “great acceleration’ in our economic activity back in the mid-20th century, there has been significant improvements in human welfare. This has brought upon the research that there is an immense need for change in our environmental habits. Luckily, this has also come at a time where blockchain is emerging along with other innovations as a means of addressing it.

Blockchain vs. Environmental Degradation

There are currently six alarming environmental issues that need immediate actions: climate change, natural disasters, biodiversity loss, ocean-health deterioration, air pollution and water scarcity. Blockchain has the capacity to release and monetize the value that is in these systems that are currently unrealized.

In the first quarter of 2018, there were 412 blockchain projects that were able to raise more than 3 billion USD via inital coin offerings (ICO). Not even 1% of these projects were part of the energy and utilities sector which was a part of the $100 million of investment, or rougly about 3% of the total investment for the quarter.

There are more than 65 available and emerging blockchain cases aimed for the environment. The blockchain use-case solutions are significant among many environmental applications. These include the following themes: creating a clean and efficient decentralized system, peerto-peer trading of resources or permits; supply-chain transparency and management; new financing models for environmental outcomes; and the realization of non-financial value and natural capital.

Game Changers

There are also an amount of potential to be seen in blockchain-enabled “game changers” that have the capacity to bring transformative solutions for environmental challenges. They have the capacity to disrupt and optimize the systems that are needed to solve these challenges. Here are some game changers you should look out for:

“See-Through” Supply Chains

Blockchains may help in creating the needed transparency in supply chains all over the world. Through recording of transactions in the supply chain and making an immutable record of the provenance, you can easily show how to trace products from the source until it reaches consumers. This transparency can lead to several opportunities to optimize. From supply and demand management, resiliency to overall creating a more sustainable production for the environment and the consumers, these are all something you can utilize.

Sustainable and Decentralized Resource Management

Blockchain has the capacity to underpin a transition to decentralized utility systems while at scale. These platforms can be used to collate distributed data on different resources. These may then end the existing asymmetry of information between stakeholders. From there, it may allow them to make more informed decision-making when it comes to system design and distribution of resources. Some of which could include peer-to-peer transactions, dynamic pricing and optimal demand-supply balancing.

New Sources for Sustainable Finance

Through blockchain, finance platforms have the potential to change access to capital and give the capacity for new investors. These projects will address environmental challenges like retail investments in green projects to donations for developing countries. On a bigger scale, there is also the potential to head a system shift from the shareholder to stakeholder value. It can also allow expansion of the traditional financial capital accounting while capturing the social and environmental capital. Altogether, the change this may cause can help raise billions of dollars that is needed to fund the shift to a more environmentally sustainable economy.

Creating Incentives for Circular Economies

Blockchain may essentially change the way materials and natural resources are currently being valued and traded. They can create incentive for individuals, companies and governments to find financial value in materials that are being wasted, thrown or handled to be economically invaluable. This may bring about behavioral change that could aid in creating a truly circular economy.

Transformations of Carbon and Other Environmental Markets

Through the use of blockchain platforms, you can optimize the existing market platform of these substances with the use of cryptographic tokes with a tradable value. These can create a lot of new opportunities when it comes to carbon credit transactions.

Next Generation Sustainability Monitoring, Reporting and Verification

Blockchain has the capacity of transforming both sustainability reporting and assurance. This can support companies in managing and improving their performance while allowing consumers and investors make better-informed choices. This may bring about a new drive for accountability and action due to the information provided. They have a more accurate and complete picture for managing risk and reward profiles.

Humanitarian Relief and Disaster Preparedness

Blockchain can easily create a new shared system aimed at multiple parties that were involved in disaster preparedness and relief. This can easily improve the effectiveness, efficiency, resource distribution and coordination. This decentralized system may allow the sharing of information like transparency of individual relief activities in the network. It may also provide quick automated transactions through smart contracts. By doing this, you can improve the efficiency after disasters which is the most critical moments in stopping loss of life and other human impacts.

Earth Management Platforms

There can be new blockchain-enabled geospatial platforms. These can allow a range of value based transactions from life on land and ocean. They may also help in managing and enabling of market mechanisms that are able to protect the environment globally. These applications are still quite far in its feasibility technically and logistically but they are a possibility that is exciting to consider.

Effect of Game Changers

These game changers are able to excite us all with its potential in creating a better and more sustainable future. However, there are still loads of risks that need to be managed. These challenges are connected blockchain’s maturity from being a technology, regulatory and legal challenge. There is also that trust of stakeholders in this technology and their openness to invest and participate in its activities.

In order to manage these risks, stakeholders have to unite in working together to create solutions that will be relevant and effective. As of the moment, these team up are few which make it extremely hard for stakeholders to maximize the opportunities in blockchain. In order to bring about sustainable and resilient growth, there needs to be decisive action.

Conclusion

There needs be global platforms established that are solely focused on creating these “responsible blockchain ecosystem” instead of incubating specific projects. These platforms can support stakeholders in various sectors to create effective blockchain solutions for different environmental challenges. They can also help ensure that blockchain technology is sustainable.

At the same time, the hype around blockchain may lead one to to attempt to use it to solve just about everything. We have noted that a structured and researched approach is needed prior to deploying blockchain as an environmental solution.

If you’re interested in reading a full study based on these game changers, you can check out the World Economic Forum’s research entitled “Building Block(chain)s for a Better Planet”.

EOI Digital always aims to to help any company or individual looking into this and how these game changers can be incorporated into your own company. With so much environmental challenges, it’s time we all take that step and utilize the tools that are right in front of us. Contact us to know more.